BSM uses a system dynamics simulation (not optimization) to model dynamic interactions
across the supply chain. The model tracks the deployment of biofuels given current
technological development and the reaction of the investment community to those technologies.
It emphasizes the effects of those influences in the context of land availability,
the competing oil market, consumer demand for biofuels, and government policies over
time. BSM strongly emphasizes the behavior and decision making of various agents and
resolves ten geographic regions domestically.

BSM is currently used to develop insights into the biofuels industry growth and market
penetration, particularly with respect to policies and incentives (volumetric, capital,
operating subsidies; carbon caps/taxes; R&D investment; loan guarantees; tax credits)
applicable to each supply-chain element. It is suitable for coupling with vehicle
choice, agricultural, oil industry, and general economic models.

The National Renewable Energy Laboratory (NREL) and the U.S. Department of Energy
(DOE) Bioenergy Technologies Office (BETO) are developing strategies for the deployment of new technology to convert
a wide range of lignocellulosic biomass feedstocks into biofuels. Over the past 25
years, the corn ethanol industry has grown to about 4.5 billion gallons per year.
The industry is based on the now well-established technology of converting the starch
in the corn kernel into glucose, followed by conventional yeast fermentation to produce
fuel-grade ethanol. The new biofuels industry envisioned by the BETO builds on the
foundations laid by the corn ethanol industry, but greatly expands the potential for
biofuels production. The vision is being realized by making use of new technology
that converts the hemicellulose and cellulose in plant matter (lignocellulosic biomass)
to fermentable sugars for the production of fuel ethanol.